Malawi registers slow growth in 2016
Malawi is among countries that registered slow growth in 2016 according to the International Monetary Fund’s (IMF) latest Regional Economic Outlook for sub-Saharan Africa.
The IMF report puts Malawi in the category of countries that had a growth rate of 1.4 percent.
The fall is described as the lowest level in more than 20 years, a development the IMF attributed to insufficient policy adjustment to account for the broad-based slowdown in growth momentum in the region.
While a modest recovery in growth to 2.6 percent is likely in 2017, the report said the underlying regional momentum remains weak, and at this rate, growth in sub-Saharan African countries will continue to fall well short of past trends of between five and six percent, and barely exceed population growth.
The IMF report said the delay in implementing critical adjustment policies leads to higher public debt, creating uncertainty, holding back investment, and risks generating even deeper difficulties in the future.
“While countries like Senegal and Kenya continue to experience growth rates higher than six percent, growth has slowed for two thirds of countries in the region bringing down average growth to 1.4 percent in 2016,” said the report.
In the report, Head of the IMF’s African Department, Abebe Aemro Selassie, has since said strong policy decisions could turn things around in the affected countries.
He further said while the impact of the drought that hit Malawi and other parts of Southern Africa last year is fading, food insecurity appears to be rising with parts of Southern and Eastern Africa facing drought and pest infestations.
“Sub-Saharan Africa remains a region with tremendous potential for growth in the medium term, but with limited support expected from the external environment, strong and sound domestic policy measures are urgently needed to reap this potential,” Selassie said.
Recently, the Malawi Economic Justice Network (Mejn) suggested to government for a budget that is poised to lay a solid foundation for a sustainable human capital development for it to pay off in the medium to long-terms.
Mejn Executive Director Daliso Kubalasa further said there has to be a careful balance in policy priorities and investments towards both productive and social sectors like education, health and social welfare in that regard.
However, President Peter Mutharika, in his State of the Nation Address at the start of the 2017/18 budget session of Parliament, said government plans to kick-start a project which will create thousands of jobs for the country’s youths.
“In the coming financial year, government, with support from development partners, will establish the Jobs for Youth Project. This project will provide entrepreneurship training and start-up capital to our youth to venture into businesses,” Mutharika said.